Pick the best answer

My exhusband filed for bankruptcy against a car that the loan is in both our names. How does that affect me?

Panama City, FL | July 9, 2009 10:34pm

When we divorced we had 2 vehicles financed at the same credit union and both our names were on each loan. My divorce papers state he is responsible for the payments on the car and I am responsible for the payments on the truck. Since both our names are on both vehicles, how does this affect me and also my truck? Our loans are connected to the point that when he would get behind on his car payment they would reverse my truck payment and apply to his car to make his more current. I do not know how to handle this. The bank said they received a certified letter from his lawyer stating he has filed bankruptcy and they cannot contact him anymore. What do I do?

If your divorce decree states he is responsible to maintain payments and he files bankruptcy then he has discharged his obligation to the creditor and they can legally pursue you for payment. You, on the otherhand have the option of having your divorce attorney file a motion for an order to show cause against your ex for violation of the marital settlement agreement/divorce decree which obligates him to make those payments. You could then seek indemnification (ie. reimbursement) from your husband for the missed payments and damage to your credit.

LEGAL DISCLAIMER
Mr. Larkin is licensed to practice law in CA and is located in San Diego. His response here does not constitute legal advice and does not create an attorney/ client relationship. The response is in the form of legal education and is intended to provide general information about the matter in question. Many times the questioner may leave out details which would make the reply unsuitable. Mr. Larkin strongly advises the questioner to confer with an attorney in their own state to acquire more information about the specifics of their case.

Your description of the facts is rather thorough but I would need to know more. You might want to consult with an attorney to obtain legal advice. Your attorney in the dissolution of marriage should be able to help you with the family law issues.

Your statement that "our loans are connected to the point..." indicates that your motor vehicle loans may be from of a credit union. Credit unions are notorious for "cross collateralization". (You'd need to review your loan docs. and account agreements for language to the effect of "Any collateral for one loan is also collateral for any other loans you may have with us...." or similar effect.) If so, you are the only person who is still liable for both loans... And, the loan docs and the account agreement would govern the application of the funds.

If the loans are not cross-collateralized, the facts you've stated don't indicate what the "connection" is. Sometimes, lenders misapply funds. (It's possible.) But, do you really want the lender to declare former spouse's vehicle so far past due that they reposses it, auction it at a private auction, and leave you stuck as the only remaining obligor on a potential repo deficiency.

Discuss this with the attorney who represented you in the dissolution of marriage. Good luck.